Company A sells short-life assets to parent Co B (the balancing allowances are nice, but this is not the motive for the transfer). Q - does the 8-year clock start ticking again or does B 'inherit' A's date of expenditure? I can't see anything that says the date is transferred across and. given that a balancing adjustment has been recognised by A it seems logical to assume that the 8-year clock starts anew?
EDIT - please ignore, the answer was easier to find than I thought
BUT - as a follow up, if I'm reading the legislation correctly (and I may well not be) it seems to suggest that if A and B so elect, the assets are treated as transferred at TWDV, so no BA/BC for A, but B can then claim AIA, because s217 is specifically disapplied. Doesn't sound right, but is it?
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On your second question, I do read it slightly differently.
I agree that the effect of section 89(6) is that A and B can elect for 89(2) and (3) to apply. I read the election as applying in relation to both 89(2) and (3) inseparably.
If section 89(2) and (3) apply. The asset is deemed transferred at TWDV and sections 217 and 218 do not apply.
If sections 89(2) and (3) do not apply sections 217 and 218 will apply and the transfer will be deemed to be at market value, by virtue of section 88.
I do not think that you can claim AIA though in the first case, because section 89(4) requires that B is treated as having made an election under section 83 for the relevant expenditure to be allocated to a short life asset pool. And claiming AIA and allocating expenditure to a short life asset pool are mutually exclusive.